Auto czar under investigation for kickbacks

posted at 9:31 am on April 17, 2009 by Ed Morrissey

Yet another of Barack Obama’s major appointments has legal troubles. Steven Rattner, the auto czar that never worked in the auto industry, did work as a senior executive at an investment firm doing business with New York’s state pension fund. According to the SEC, Rattner may have arranged illegal kickbacks in exchange for investing in the pension fund — and the Obama administration was aware of the allegations when Obama appointed him auto czar (via JWF):

Steven Rattner, the leader of the Obama administration’s auto task force, was one of the executives involved with payments under scrutiny in a probe of an alleged kickback scheme at New York state’s pension fund, according to a person familiar with the matter.

A Securities and Exchange Commission complaint says a “senior executive” of Mr. Rattner’s investment firm met with a politically connected consultant about a finder’s fee. Later, the complaint says, the firm received an investment from the state pension fund, then paid a $1.1 million fee.

The “senior executive,” not named in the complaint, is Mr. Rattner, according to the person familiar with the matter. He is co-founder of the investment firm, Quadrangle Group, which he left to join the Treasury Department to oversee the auto task force earlier this year.

A spokeswoman for the Treasury, which is in charge of the auto task force, said that “during the transition, Mr. Rattner made us aware of the pending investigation.”

Doesn’t this sound a little familiar? Tim Geithner at Treasury blew off paying tens of thousands of dollars in taxes over several years, even though he had received reimbursement to pay them. The Obama administration insisted on appointing him to Treasury Secretary anyway, despite the fact that Geithner would run tax collection, declaring him the only person in America who could do the job. Bill Richardson got appointed to Commerce Secretary despite a publicly-known pay-to-play investigation involving the Governor, which eventually forced Richardson into a humiliating withdrawal. A series of high-level nominees with tax and ethics problems followed, including Cabinet appointees Hilda Solis, Tom Daschle, and Kathleen Sebelius.

And once again, we not only have an appointment with legal and ethical problems, we have another one that the Obama administration appointed knowing about them. In this case, one can hardly claim that Rattner was “uniquely qualified” to run the auto industry; he has no experience in the auto industry at all.

Barack Obama ran on the promise to change the way Washington does business, but clearly he must have meant for the worse. He’s already surpassed the number of ethically tarnished appointments for Bush and Clinton combined, and he hasn’t yet hit 90 days in office. Did Hope and Change mean Kickback Artists and Tax Cheats?